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Murray Trust Repo Series No.1 Class A Notes Rating Affirmed

MELBOURNE (S&P Global Ratings) Nov. 14, 2023--S&P Global Ratings today affirmed its 'AAA (sf)' rating on the class A residential mortgage-backed securities (RMBS) issued by Perpetual Corporate Trust Ltd. as trustee for Murray Trust Repo Series No.1.

The rating affirmation follows the issuance of an additional A$46.7 million of class A notes and A$4.1 million of class B notes, bringing the respective balances to A$310.0 million and A$19.8 million. Following the issuance, the aggregate amount of class A and class B notes is approximately A$329.8 million. The proceeds from the note issuance will be used to fund the acquisition of additional loans, as contemplated in the transaction structure.

The rating affirmation reflects the following factors:

  • Our assessment of the underlying collateral portfolio as of Oct. 31, 2023, and the eligibility criteria for the acquisition of additional loans.
  • That the underlying collateral portfolio consists of 1,566 consolidated loans, with a weighted-average current loan-to-value ratio of 53.3% and weighted-average loan seasoning of 44 months.
  • That the support provided for the class A notes in the form of lenders' mortgage insurance (LMI) policies on 19.1% of the pool of mortgages and subordination provided by the class B notes, which exceeds the level of credit support commensurate with a 'AAA (sf)' rating.
  • That 35% of the collateral pool originates from three postcodes in the Albury-Wodonga area, according to our analysis, reflecting Hume Bank Ltd.'s branch footprint. Our view is that clustered geographic distributions are potentially at greater risk of being adversely affected by a localized economic downturn. We consequently apply a greater stress to location concentrations.
  • That the portfolio is also heavily concentrated, at 82.0%, to security properties that we classify as nonmetropolitan. Our view is that defaults on nonmetropolitan properties could be more frequent during periods of economic stress because of population and economic factors. We have increased the default frequency in the pool to reflect this concentration and assumed a longer realization period for loans secured by nonmetropolitan properties to reflect the weaker employment trends and longer selling periods that tend to occur in nonmetropolitan areas.
  • That the non-amortizing liquidity reserve, equaling A$8.245 million, is adequate to cover timely payment of interest and trust expenses.
  • That the LMI policies on the insured loans cover 100% of the outstanding principal of the loans insured, including accrued interest during the recovery period and reasonable realization costs.
  • Hume Bank's underwriting standards, processes, and servicing quality, which are consistent with industrywide practices.

Related Criteria

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Please refer to the initial rating report for any additional regulatory disclosures that may apply to a transaction.


S&P Global Ratings Australia Pty Ltd holds Australian financial services license number 337565 under the Corporations Act 2001. S&P Global Ratings' credit ratings and related research are not intended for and must not be distributed to any person in Australia other than a wholesale client (as defined in Chapter 7 of the Corporations Act).

Primary Credit Analyst:Rohan Libbis, Melbourne +61 3 9631 2172;
Secondary Contact:Timothy J Bartl, CFA, Melbourne + 61 3 9631 2103;

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